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Silverman v. Peltz (In re Peltz)
Citations: 263 B.R. 721; 2001 U.S. Dist. LEXIS 8641Docket: Bankruptcy No. 92 B 46996(PCB); Adversary No. 98/9236A
Court: District Court, S.D. New York; June 27, 2001; Federal District Court
Defendants sought leave to appeal a Bankruptcy Court order from April 22, 1999, which denied their motion to dismiss a complaint brought by Trustee Kenneth P. Silverman against Debtor Samuel Peltz and his wife, Faye Peltz. The complaint aimed to recover property wrongfully retained by the defendants and to set aside fraudulent conveyances, while also seeking to bar Debtor's discharge. Defendants argued the complaint was barred by the statute of limitations, claiming all claims sounded in fraudulent conveyance and were time-barred under Section 546, as the action was initiated two years after the Trustee's appointment following the conversion of Debtor's case to Chapter 7. The Bankruptcy Court, however, denied the motion to dismiss, stating that the Trustee had properly pleaded alternative turnover claims, and noted that if successful on those claims, the fraudulent conveyance claims would be moot. In denying the defendants' motion for interlocutory appeal, the court found that the statute of limitations issue did not constitute a controlling question of law nor would it materially advance the litigation. The court referenced 28 U.S.C. 1292(b), which outlines the criteria for certifying an order for interlocutory appeal, indicating that the existing order did not meet those standards. The Bankruptcy Court's order from March 18, 1999, affirms that the Trustee has adequately presented his turnover claims. The Court indicated that if the Trustee proves these claims at trial, the fraudulent conveyance claims may not need to be addressed. Conversely, if the Trustee fails to prove the turnover claims and opts to pursue fraudulent conveyance claims, the Court will consider the statute of limitations defense at that point. The Court noted that the legal questions posed by the defendants are not controlling at this stage. Additionally, both turnover and fraudulent conveyance claims are based on similar facts and require the same discovery. The Court emphasized that the trial would proceed similarly regardless of whether the fraudulent conveyance claims are included, as the property in question is claimed to belong to the debtor. As such, resolving the statute of limitations under Section 546 at this time would not significantly advance the case. Consequently, the defendants' motion for leave to appeal has been denied, with the Court stating that the statute of limitations defense may become moot depending on the Trustee's case presentation.